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Source: United Nations Special Coordinator for the Middle East Peace Process (UNSCO)
30 January 2011


Since 1996 UNSCO has continually monitored and reported on socio-economic conditions in the occupied Palestinian territory (oPt) and, in the process, established an extensive socio-economic database. UNSCO does not produce primary data but rather makes use of available data, that in oPt are relatively abundant. The information that is available, however, often remains dispersed and is not automatically shared between institutions. The objective of the database is to collate a wide range of social and economic indicators in one location, and, through the report, present a broad perspective on socio-economic conditions in oPt.
The purpose of the present report is to: 1) broaden the access to the information contained in the database through publication of the most recent data gathered; and 2) provide readers with up-to-date information on socio-economic conditions in the occupied Palestinian territory.

The report is divided into six sections, as follows:

Section I. consists of a one-page fact sheet that provides a snapshot view of the socio-economic situation for the current and previous reporting periods.

Sections II. and III. report on the macro-economic and fiscal situation, and sections IV. and V. give an overview of developments in the banking and private sectors, respectively. Section VI is dedicated to issues on Gaza.

Two annexes provide detailed reference information. Annex A presents detailed statistical reference tables, and Annex B lists the main socio-economic terms used in this report along with their corresponding definitions.

Topics of current interest are analyzed in-depth in periodic “Supplements”.

Most sections provide data on the six preceding reporting periods for each indicator and, for comparison purposes, data for a reference period immediately before the Al-Aqsa intifada, which started in September 2000, or the closest time period available.

Note: The data for the West Bank and oPt in this report do not include occupied East Jerusalem unless otherwise specified.


Sources: PCBS: production, prices, labor market; MoF: public sector; PMA: banking sector; MoNE: new company registrations; Engineering Offices and Consulting Firms: area licensed for new construction; MoNE and General Petroleum Corporation: Gaza truck movement; UNSCO: closure and Gaza truck movement
a/ Data not available.
b/ Preliminary data.
c/ Includes data for occupied East Jerusalem.
d/ MoNE data for August 2000 do not include aggregates or aid flows.

Sanitation Infrastructure in Educational Establishments in the West Bank and the Gaza Strip

The infrastructure available in educational establishments for disposing of wastewater shows marked differences between the Gaza Strip and the West Bank. In particular, connectivity to the wastewater network is more prevalent in the Gaza Strip (77%), with the notable exception of the Khan Yunis governorate (11%), than in the West Bank (32%). On the other hand, more than half of educational establishments in the West Bank (52%) use porous cesspools as a disposal method, as compared to only a fifth (19%) in the Gaza Strip.

A porous cesspool is a hole dug in the ground that is loosely lined on the inside. Wastewater flows into the pit, and the liquids filter through the gaps in the lining and are absorbed into the earth.

This type of cesspool is useful when a connection to a wastewater network is not available, but it presents serious environmental and sanitary concerns. A major problem with it is that the liquids that leach in the ground are tainted, and eventually the soil around the cesspool becomes polluted. In addition, the untreated wastewater can infiltrate any nearby groundwater supply and contaminate it, seriously affecting the quality of the underground water and even making it unfit for human consumption. The use of porous cesspools is, therefore, especially dangerous in communities where neighbors depend on wells for their water.

These findings confirm the urgent need for rehabilitation and expansion of the drainage and wastewater network in oPt.

Educational Establishments by Wastewater Disposal Method, 2010

II.a Production

Percent Change in Real Quarterly GDP

Source: PCBS. Note: Base year is 2004. Comparable data prior to Q2/2004 are not available from PCBS.

Real GDP shrank in Q3/2010, brining to an end a period of continuous expansion that lasted for 6 quarters. The rate of change, which exhibits considerable volatility over time, was -0.6% in Q3/2010, and -1.3% in (non-annualized) per capita terms. The contraction was experienced in the West Bank, where real GDP was 3.5% lower in Q3 than in Q2. The Gaza Strip, on the other hand, witnessed an 8.0% rise in real quarterly GDP. Still, GDP in Gaza is relatively small and contributes only around a fourth of total GDP.

Compared to the second quarter, economic expansion in Q3/2010 was greatest in the construction sector (14.3%), and the sharpest decline was observed in agriculture (22.8%). The main economic activities in oPt continue to be services (21.6% of total GDP) and public administration and defense (14.5% of total GDP).

II.b Prices

Consumer Price Index (2004 = 100)

Source: PCBS.

The Consumer Price Index (CPI), used to measure inflation, reflects a small increase (0.1%) in prices in January 2011 compared to the previous month, but an inflation rate of 2.9% in the year since January 2010. Year-on-year inflation was highest in East Jerusalem (4.4%), followed by the West Bank (3.5%). Two sectors experienced an overall decline in prices in January: food and soft drinks, and miscellaneous goods and services. During this month the greatest rises were in the transportation and housing sectors.

Change in Consumer Price Index by Major Expenditure Groups

January 2011

Source: PCBS.

The CPI fell slightly in the West Bank, led by a decrease in the cost of food and soft drinks. The price of transportation and housing saw the biggest increases in this region.

In the Gaza Strip the CPI increased slightly, pushed by a rise in the price of restaurants and cafes. The most significant decline in prices in Gaza during the month was in miscellaneous goods and services.

In East Jerusalem the CPI rose, pushed primarily by an almost 5% rise in cost of transportation. The price of food and soft drinks saw the biggest decline, followed by the cost of medical care and communications.

II.c Exchange rates

Both the NIS and the JOD fell against the euro in January 2011. The NIS rose against the US dollar, while the JOD’s exchange rate to the US dollar is constant at 0.71.

Average Monthly Exchange Rates

II.d Labor market
Labor force participation increased in Q4/2010 in both the West Bank and the Gaza Strip.

Labor force participation rate (%)
(Labor force in thousands)

The service sector continues to be the biggest employer in oPt. Compared to the year 2000, the labor market seems to show a structural change away from construction and manufacturing and significant growth in the service sector.

In Q4/2010, average daily net wages rose for workers in all areas, most notably for those who work in Israel and settlements. They showed a modest increase in Gaza, where average daily wages remain only about 70% of wages in the West Bank.

The unemployment rate measures the unutilized labor supply and gives a broad indicator of the labor market situation and of the general performance of the economy as a whole. In oPt, unemployment remains high at 23.4%, with the rate in Gaza about double the rate in the West Bank. Similarly, (data from Q3/2010 reveal that) the youth rate (15 to 24 years) is about twice the adult rate (25 years and over).

Source: PCBS, Labor Force Survey.
Note: The data by age group are for Q3/2010, when overall employment was 26.6%. Data for Q4/2010 are not available from PCBS.

Sub-national level data show great disparities among governorates. Whereas the labor force is only about 14,000 in the Jericho governorate, it surpasses 100,000 in Hebron and Gaza City. Similarly, unemployment rates range from 10% in Tubas to 51% in Khan Yunis. Unemployment in all Gaza governorates is higher than in any West Bank governorate. Gaza City has the lowest unemployment rate in the Gaza Strip (31%), while the highest unemployment rate in the West Bank is found in Hebron (22%).

A similar situation is observed with regards to wages. The lowest average wages are found in Gaza, with a low average of around NIS55 a day in Khan Yunis and a high of NIS71 in Rafah. In the West Bank, average daily wages range from around NIS75 in Jericho to NIS145 in Jerusalem.

Source: PCBS, Labor Force Survey.
Note: The boundaries and the names shown and the designations used on the map do not imply official endorsement or acceptance by the UN.

Q4/2010 saw a decrease in the unemployment rate, most notably in the West Bank. In both the West Bank and the Gaza Strip, the level of unemployment remains more than 2.5 times higher than it was in Q2/2000. (See Table A2. in Annex A for further details.)

Rate of Unemployment and Adjusted Unemploymenta

Source: PCBS, Labor Force Surveys.
aAdjusted unemployment includes those who are unemployed and those too discouraged to look for work (see detailed definition in Annex B).



Source: Ministry of Finance.
Information on bank credit, particularly credit to productive sectors, gives an indication of economic progress and business confidence. Data for oPt show a gradual increase in the use of credit, most of which is destined to businesses, followed by consumers. The distribution of credit by borrowing entity has not shown major changes in the last quarters.

Source: PMA.

Most of bank credit is in the form of loans, and their relative weight as a proportion of total bank credit grew over time until Q2/2010, as that of overdrafts fells. (See further details in Tables A4. and A5. in Annex A.)

Q4/2010 saw an increase of close to 3% in total bank deposits. Deposits stem mainly from the private sector (90% of total deposits), particularly from residents (87%). The proportion corresponding to non-residents declined by almost 30% in Q4, following a sharp fall of 44% in Q3/2010. The proportion of public sector deposits in total deposits doubled to 10% between Q2/2000 and Q4/2010. Similarly, the proportion of government deposits in total public sector deposits has grown notably over time.

Source: PMA.
Note: Excludes deposits of the PMA and commercial banks.
Current accounts are the main form of deposits for residents and non-residents, as well as for government. (See further details in Table A6. in Annex A.)
The amount of loans relative to deposits gives an idea of the liquidity of the banking system. In a functioning economy, a relative increase in loans versus deposits (within limits) can be perceived as a positive sign, as monies are not saved but invested or consumed, which in turn stimulates the economy. In oPt, the loan-to-deposit ratio decreased in Q4/2010 as deposits grew faster than loans. (See further details in Table A7. in Annex A.)

Source: PMA.
Note: The totals may not be exactly equal to the sum of percentages due to rounding.
The number of new company registrations can give a rough indication of the vitality of economic activity and reveal something about the ability of the local economy to create new employment. The number of new companies being registered in the West Bank in January 2011 increased by 7% compared to December 2010. However, when compared to pre-intifada registrations, the number of new company registrations is still only 70% of the August 2000 level. For Gaza, data identify 43 new registered companies in January 2011, more than 70% higher than in December 2010, but still less than half the pre-intifada level. (See further details in Table A8. in Annex A).

The area licensed for new construction can also be used as a proxy for economic vitality. December 2001 data show a sharp rise in the area licensed for new construction in the West Bank compared to the previous month, but this rise is likely to be accounting for unfinished constructions that reapply for licenses for the coming year. By January 2001 the level was only 5% above the one observed before December. In the Gaza Strip, there was a rise of 1% in the area licensed for new construction in January 2011. (See further details in Table A9. in Annex A.)

Source: Engineering Offices and Consulting Firms.

Data on the Palestinian stock exchange are used as a proxy of Palestinian perceptions vis-à-vis the state of the national economy. Data for January 2101 show a decrease of approximately 6% in the number of stocks traded but a decrease of 36% in the value of shares traded. The Al-Quds index was almost unchanged.

There was a significant increase in the amount of cooking gas imported in Gaza in January 2011, with 3,055 tons allowed in through Kerem Shalom (Karm Abu Salem), which represents an 11% increase compared to the volume allowed in in December 2010. During the reporting period, 44,802 liters of petrol and 213,795 liters of diesel were imported for UNRWA, and 93,800 liters of petrol and 38,000 liters diesel for the private sector.

Volume of Registered Fuel Sales in the Gaza Strip

Source: General Petroleum Corporation. Note: On 1 January 2010,
Israel declared Nahal Oz fuel pipelines closed, with fuel being transferred to Gaza only via Kerem Shalom.

January 2011 data reveal a decline of 7% in the total number of truckloads imported into the Gaza Strip compared to December 2010. (See further details in Table A10. in Annex A.)

Karni crossing has remained closed since 12 June 2007 for the movement of goods in and out of Gaza. The single conveyor belt/chute for cereals and animal feed at Karni was open for a total of 9 days during January 2011. One thousand and five truckloads of animal feed, wheat and gravel for UNRWA and the Coastal Municipalities Water Utility entered Gaza via the conveyor belt. Of the 2,978 truckloads entering Gaza through Karem Shalom during the month, 2,724 (91%) were for the private sector and the remaining 254 (9%) were designated for humanitarian aid agencies. Food items made up 44% of imported goods (1,310 truckloads), while 56% of imports (1,668 truckloads) were non-food items.

Following the June 2010 decision to change policy and ease the closure of Gaza, monthly import levels have fluctuated between roughly 3,900 and 5,200 truckloads. On average, imports have grown by 6% per month since June 2010, which has not been enough to reach the level of imports observed before the closure was tightened in 2007. In January 2011 imports were only about 80% of the May 2007 level and only 50% of the August 2000 level.

On 8 December 2010 Israel announced its intention to expand the number and range of exports permitted from Gaza. Allowed exports now include agricultural produce, furniture, textiles, and light industrial products.

In January 2011 Israel allowed Gaza to export strawberries, flowers and sweet peppers to Europe and the West Bank. In total, 88 trucks of strawberries (167.6 tons), 17 trucks of carnations (2,762,000 stems) and 2 trucks of sweet peppers (5 tons) were exported to the West Bank and Europe via the Kerem Shalom crossing.

ANNEX A: Statistical reference tables

ANNEX B: Terms and Definitions

Adjusted unemployment rate - The adjusted unemployment rate presents the number of unemployed according to the relaxed definition as a percentage of the labor force. The relaxed definition of unemployment includes all persons aged 15 or over who are unemployed plus those who, during the reference period, are without work, are available for work but did not seek work (and therefore could not be classified as unemployed) because they felt that no work would be available to them.

The adjusted unemployment rate gives a broader measure of the unutilized supply of labor. The relaxation of the standard definition of unemployment makes sense in circumstances where the conventional means of seeking work are of limited relevance, where the labor market is largely unorganized, where labor absorption is inadequate or where the labor force is largely self-employed.

Al-Quds index - This is the primary stock index of the Palestine Securities Exchange (PSE).

Area licensed for new construction - This is the area licensed for construction in new and existing buildings.

Average daily net wage - This average is calculated as the total net wages paid to all employees divided by total workdays. Wages received in different currencies are converted into New Israeli Shekels according to the exchange rate in the survey month.

Bank credit - It measures the borrowing capacity provided to individuals, firms and organizations by the banking system in the form of loans or other types of credit. Credit is generally believed to contribute to economic growth.

Bank deposits - Deposits are accounts maintained by a bank on behalf of customers. This indicator is often used to measure the safety of and people’s trust in the banking system.

Consumer Price Index (CPI) - The CPI is a statistical tool used to measure changes over time in the prices paid by households for a basket of goods and services that they customarily purchase for consumption. The CPI is used to measure inflation over time. The main categories of goods and services included in the basket of goods are: fruits, vegetables and other food items, beverages, tobacco, textiles, clothing, footwear, furniture, household appliances, household utensils, fuel, power, transportation, communications, medical and pharmaceutical products, goods for personal care, services charges for public transport, communication, hospital care, and others, and school fees. Data on prices for consumers are collected through visits conducted by trained staff to selected markets including groceries, supermarkets, markets, restaurants, general services offices, hospitals, private schools, etc.

Effective/partial closure days - Effective closure days are calculated by adding all days when a crossing is fully or partially closed, excluding weekends and holidays. Partial closure means that the crossing is closed for more than one hour but not for a full day, in which case it would be considered fully closed. Weekends and holidays include all Saturdays, half the Fridays (since labor and commercial flows are about half their normal workday level on Fridays) and universally celebrated Jewish and Muslim holidays. Jewish and Muslim holidays which fall on Saturday or Friday are not counted as a holiday but as a Saturday (full day closure) or Friday (half day closure), respectively. 16

Employed - The “employed” comprise all persons are 15 years or over who were working at a paid job or business for at least one hour during the week prior to the survey, or who did not work but held a job or owned business from which they were temporarily absent (because of illness, vacation, temporarily stoppage, or any other reason) during the reference week.

Exchange rate - The price of one currency stated in terms of another currency is the exchange rate.

Exports - Exports are any good or commodity, shipped or otherwise transported out of the territory to another part of the world, typically for use in trade or sale. Export products or services are provided to foreign consumers by domestic producers.

Gross Domestic Product (GDP) - GDP is the total value of all goods and services produced within oPt in a given period of time. When GDP is expressed in constant terms (real GDP), a deflator is used to adjust for changes in money-value. Quarterly data are annualized by multiplying by 4.

GDP per capita - This is the result of the division of GDP by total population.

GDP rate of change - The rate of change is the percentage change (increase or decrease) of GDP from the previous measurement cycle.

Inflation rate - The inflation rate is the percentage change in the price index over time.

Government total net revenue -It measures the net inflows received by the government, including clearance revenue, tax refunds, and tax and non-tax revenue collected by the Ministry of Finance and other ministries for the consolidated Single Treasury Account (STA).

Government wage expenditure -This is the government’s outlay on the wages and salaries of permanent civilian and security employees.

Government non-wage expenditure - This is the part of government expenditure absorbed by operational expenditures, transfers and minor development and capital expenditures.

Government net lending -This term includes transfers to local government to cover clearance revenue, deductions by the Government of Israel for water and electricity, and services by the Ministry of Health and the Ministry of Agriculture. 17

Government balance - The government balance is the difference between the government’s total net revenue and its expenditures, including wage and non-wage expenditures, net lending and development expenditures.

External budget support - It consists of transfers of resources by donor countries to the Palestinian National Authority to help finance its budget.

Imports - Imports are the goods and services that are produced by the foreign sector and are purchased by the domestic economy.

Labor force - The labor force consists of all persons of working age (15 years or over) who are either employed or unemployed during a specified reference period. Excluded from the labor force are those of working age who are neither working nor searching for work. These could be students, retired persons, those in prison, and homemakers.

Loan-to-deposit ratio - This ratio gives the amount of banks’ loans divided by the amount of their deposits. The statistic is often used to assess the banking system’s liquidity. If the ratio is too high it may imply that banks could not have enough liquidity to cover any unforeseen fund requirements. Conversely, if the ratio is too low banks may not be lending and earning as much as they could be.

Number of new company registrations - his is the number of new companies that register with the Ministry of National Economy to conduct business operations in oPt.

Number of shares traded - It is the amount of shares that trade hands from sellers to buyers in the market over a given period.

Underemployment - Underemployment exists when a person’s employment is inadequate in relation to specified norms or alternative employment. Time-related underemployment applies to those who involuntarily work less than the normal duration of work determined for the activity and who seek or are available for additional work during the reference week.

Unemployment rate - The "unemployed" comprise all persons aged 15 or over who, during the week before the survey, were without work, available for work and seeking work. The unemployment rate expresses the number of unemployed as a percentage of the total labor force. The indicator is widely used as a measure of unutilized labor supply.

Value of shares traded - The value of shares traded is the sum of the shares traded multiplied by their respective matching price

For further information or to be added to the mailing list please contact:
UNSCO Ramallah: Astrid Marschatz
UNSCO Gaza Strip: Raed Raqeb UNSCO Gaza Strip: Raed Raqeb
The UNSCO Socio-Economic Report is also accessible on

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